See Milton Friedman's "The Methodology of Positive Economics" (https://en.wikipedia.org/wiki/Essays_in_Positive_Economics):
"Truly important and significant hypotheses will be found to have "assumptions" that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions (in this sense) (p. 14)."
Re:How economics became a religion
by thinkfurther on Sunday July 16, 2017 @04:23PM
(#14783957)
> A lot of economics is just concepts built on pure math
A lot of numerology is also pure math, addition for example.
Re:How economics became a religion
by raverbashing on Monday July 17, 2017 @04:49AM
(#14786695)
If you can't see the difference between an interest rate and "finding your lucky number" this discussion can't be furthered
Re:How economics became a religion
by thinkfurther on Monday July 17, 2017 @09:34PM
(#14793727)
Interest rate is "pure math", and used within a framework, parts of it rather arbitrary. "finding your lucky number" is framework and adding up numbers in a name or stuff like that is "pure addition", so that framework uses pure math. That's my point, you're just not getting it.
Statistical models also are interesting but there are limitations, both at micro and macro levels
But I think people take its prediction power too seriously and ignore linked events that seem independent at first (like low graded loans failing affecting payment of other loans)